For the three months ended December 31, 2016, gathering volumes averaged 1,203 MDth/d, a 71% increase over the prior year quarter and a 26% increase relative to third quarter 2016, with 24% attributable to third-party volumes. Compression volumes averaged 825 MDth/d, a 778% increase over the prior year quarter and an 11% increase relative to third quarter 2016, with 36% attributable to third-party volumes. Fresh water delivery volumes were 321 MMgal, or an average of 3.5 MMgal/d, a 59% increase relative to the prior year quarter and a 138% increase relative to third quarter 2016.

Operating revenues were $59.5 million, comprised of $41.8 million in revenues from our gathering and compression segment and $17.7 million in revenues from our water services segment. Operation and maintenance expense totaled $7.3 million, including $2.9 million for gathering and compression and $4.4 million for water services. Net income was $34.3 million, or $0.33 per limited partner unit. Adjusted EBITDA(1) was $46.2 million and, after giving effect to $2.8 million of estimated maintenance capital expenditures and cash interest expense of $1.6 million, DCF(1) was $41.9 million, resulting in a DCF coverage ratio of 1.58x.

We invested approximately $22 million of net expansion capital, excluding acquisitions, including $17 million to develop gas gathering and compression assets and $5 million to develop our water services assets.

For the year ended December 31, 2016, gathering volumes averaged 983 MDth/d, a 52% increase over the the prior year, with 27% attributable to third-party volumes. Compression volumes averaged 572 MDth/d, a 794% increase relative to the prior year, with 43% attributable to third-party volumes. Fresh water delivery volumes were 1,253 MMgal, or an average of 3.4 MMgal/d, with 11% attributable to third-party volumes.

Operating revenues were $201.6 million, comprised of $132.1 million in revenues from our gathering and compression segment and $69.5 million in revenues from our water services segment. Operation and maintenance expense totaled $24.6 million, including $8.0 million for gathering and compression and $16.6 million for water services. Net income was $121.6 million, or $1.46 per limited partner unit. Adjusted EBITDA(1) was $158.4 million and, after giving effect to $11.2 million of estimated maintenance capital expenditures and cash interest expense of $3.9 million, DCF(1) was $143.2 million, resulting in a DCF coverage ratio of 1.70x.

We invested approximately $104 million of net expansion capital, excluding acquisitions, including $99 million to develop gas gathering and compression assets and $5 million to develop our water services assets.

Average Daily Throughput (MDth/d)

Three Months Ended

Year Ended

Gathering Assets

December 31, 2016

December 31, 2016

Affiliate

910

714

Third-party

293

269

Total

1,203

983

% Third-party

24%

27%

Average Daily Compression Volumes (MDth/d)

Three Months Ended

Year Ended

Compression Assets

December 31, 2016

December 31, 2016

Affiliate

531

327

Third-party

294

245

Total

825

572

% Third-party

36%

43%

Average Water Volumes (MMGal)

Three Months Ended

Year Ended

Water Services Assets

December 31, 2016

December 31, 2016

Pennsylvania Water

149

521

Ohio Water

172

732

Total

321

1,253

% Third-party

—%

11%

On October 19, 2016, concurrent with Rice Energy’s acquisition of Vantage Energy, we purchased entities owning the Vantage Energy midstream assets from Rice Energy for $600 million. The assets are located in Greene County, Pennsylvania and include 30 miles of dry gas gathering and compression assets. In connection with the acquisition, Rice Energy dedicated the acquired 85,000 net acres to RMP to provide gas gathering, compression and freshwater distribution services.

As of December 31, 2016, we had $660 million of availability on our revolving credit facility and $22 million of cash on hand, resulting in $682 million of total liquidity to fund our 2017 capital budget. We exited the year with a low leverage of 1.1x net debt to 2016 Adjusted EBITDA(1).

1.

Please see “Supplemental Non-GAAP Financial Measures” for a description of Adjusted EBITDA and related reconciliations to comparable GAAP financial measures.

Quarterly Cash Distribution

On January 20, 2017, we declared a quarterly distribution of $0.2505 per unit for the fourth quarter 2016, an increase of $0.0135 per unit relative to third quarter 2016. The distribution was payable on February 16, 2017 to unitholders of record as of February 7, 2017.

Conference Call

RMP will host a conference call on February 23, 2017 at 11:00 a.m. Eastern time (10:00 a.m. Central time) to discuss fourth quarter and full-year 2016 financial and operating results. To listen to a live audio webcast of the conference call, please visit RMP’s website at www.ricemidstream.com. A replay of the conference call will be available following the call for two weeks and can be accessed from RMP’s homepage.

Rice Energy will host a conference call on February 23, 2017 at 10:00 a.m. Eastern time (9:00 a.m. Central time) to discuss fourth quarter and full-year quarter 2016 financial and operating results and we encourage RMP investors to listen-in. To listen to a live audio webcast of the conference call, please visit Rice Energy’s website at www.riceenergy.com. A replay of the conference call will be available for two weeks and can be accessed from Rice’s homepage.

About Rice Midstream Partners

Rice Midstream Partners LP is a fee-based, growth-oriented limited partnership formed by Rice Energy Inc. (NYSE: RICE) to own, operate, develop and acquire midstream assets in the Appalachian basin. RMP provides midstream services to Rice Energy and third-party companies through its natural gas gathering, compression and water assets in the rapidly developing dry gas cores of the Marcellus and Utica Shales.

This release includes forward-looking statements that are subject to a number of risks and uncertainties, many of which are beyond our control. All statements, other than historical facts included in this release, that address activities, events or developments that we expect or anticipate will or may occur in the future, including such things as, forecasted gathering volumes, revenues, Adjusted EBITDA, distribution growth, and distributable cash flow, the timing of completion of midstream projects, future capital expenditures (including the amount and nature thereof), business strategy and measures to implement strategy, competitive strengths, goals, expansion and growth of our business and operations, plans, market conditions, references to future success, references to intentions as to future matters and other such matters are forward-looking statements. All forward-looking statements speak only as of the date of this release. Although we believe that the plans, intentions and expectations reflected in or suggested by the forward-looking statements are reasonable, there is no assurance that these plans, intentions or expectations will be achieved. Therefore, actual outcomes and results could materially differ from what is expressed, implied or forecast in such statements.

We caution you that these forward-looking statements are subject to risks and uncertainties, most of which are difficult to predict and many of which are beyond our control, incident to our gathering and compression and water services businesses. These risks include, but are not limited to: commodity price volatility; inflation; environmental risks; regulatory changes; the uncertainty inherent in projecting future throughput volumes, cash flow and access to capital; and the timing of development expenditures of Rice Energy or our other customers. Information concerning these and other factors can be found in our filings with the Securities and Exchange Commission, including our Forms 10-K, 10-Q and 8-K. Consequently, all of the forward-looking statements made in this news release are qualified by these cautionary statements and there can be no assurances that the actual results or developments anticipated by us will be realized, or even if realized, that they will have the expected consequences to or effects on us, our business or operations. We have no intention, and disclaim any obligation, to update or revise any forward-looking statements, whether as a result of new information, future results or otherwise.

Rice Midstream Partners LP

Statements of Operations

(Unaudited)

Three Months Ended

Year Ended

December 31,

December 31,

(in thousands, except per unit data)

2016

2015

2016

2015

Operating revenues:

Affiliate

$

46,993

$

21,379

$

152,260

$

93,668

Third-party

12,473

7,935

49,363

20,791

Total operating revenues

59,466

29,314

201,623

114,459

Operating expenses:

Operation and maintenance expense

7,297

4,882

24,589

14,910

General and administrative expense

6,022

3,072

18,759

13,394

Incentive unit (income) expense (1)

—

(4)

—

1,044

Equity compensation expense (1)

145

1,185

2,873

4,501

Depreciation expense

7,456

5,944

25,170

16,399

Acquisition costs

52

—

125

—

Amortization of intangible assets

412

408

1,634

1,632

Other expense

1,292

51

1,531

543

Total operating expenses

22,676

15,538

74,681

52,423

Operating income (loss)

36,790

13,776

126,942

62,036

Other (expense) income

78

—

78

11

Interest expense (1)

(1,562)

(1,094)

(3,931)

(3,164)

Amortization of deferred finance costs

(1,046)

(144)

(1,479)

(576)

Income (loss) before income taxes

34,260

12,538

121,610

58,307

Income tax expense

—

(17)

—

(5,812)

Net income

$

34,260

$

12,521

$

121,610

$

52,495

Net income

$

34,260

$

12,521

$

121,610

$

52,495

Less: Pre-acquisition net income (loss) allocated to general partner

—

992

—

7,296

Less: General partner interest in net income attributable to incentive distribution rights

888

—

1,428

—

Net income attributable to limited partners

$

33,372

$

11,529

$

120,182

$

45,199

Weighted average limited partner units (in millions)

Common units (basic)

72.0

36.5

52.8

30.7

Common units (diluted)

72.2

36.7

53.1

30.8

Subordinated units (basic and diluted)

28.8

28.8

28.8

28.8

Net income attributable to RMP per limited partner unit (2)

Common units (basic)

$

0.33

$

0.18

$

1.46

$

0.76

Common units (diluted)

$

0.33

$

0.18

$

1.45

$

0.76

Subordinated units (basic and diluted)

$

0.33

$

0.18

$

1.50

$

0.76

Adjusted EBITDA (3)

$

46,225

$

19,065

$

158,353

$

63,780

Distributable cash flow (4)

$

41,863

$

16,997

$

143,222

$

56,944

Quarterly distribution per unit

$

0.2505

$

0.1965

$

0.9210

$

0.7680

Distribution declared:

Limited partner units – Public

$

18,416

$

8,284

$

56,371

$

24,715

Limited partner units – GP Holdings

7,204

5,651

26,485

22,086

General Partner

888

—

1,429

—

Total distributions declared

$

26,508

$

13,935

$

84,285

$

46,801

DCF coverage ratio (5)

1.58

1.22

1.70

1.22

1.

Prior to their acquisition by us, our water assets were allocated incentive unit expense, equity compensation expense and interest expense initially recognized by Rice Energy. These non-cash charges are described in more detail in Note 9 to the consolidated financial statements in our Form 10-K.

2.

Net income per limited partner unit does not include results attributable to the water assets prior to their acquisition as these results are not attributable to our limited partners.

Adjusted EBITDA, distributable cash flow and DCF coverage ratio are non-GAAP supplemental financial measures that management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess the financial performance of our assets, without regard to financing methods, capital structure or historical cost basis; our operating performance and return on capital as compared to other companies in the midstream energy sector, without regard to historical cost basis or, in the case of Adjusted EBITDA, financing or capital structure; our ability to incur and service debt and fund capital expenditures; the ability of our assets to generate sufficient cash flow to make distributions to our unitholders; and the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.

We define Adjusted EBITDA as net income (loss) before interest expense, depreciation expense, amortization of intangible assets, non-cash equity compensation expense, amortization of deferred financing costs and other non-recurring items. Adjusted EBITDA is not a measure of net income as determined by GAAP. We define distributable cash flow as Adjusted EBITDA less cash interest expense, and estimated maintenance capital expenditures. We define DCF coverage ratio as distributable cash flow divided by total distributions declared. Distributable cash flow does not reflect changes in working capital balances and is not a presentation made in accordance with GAAP.

We believe that the presentation of Adjusted EBITDA, distributable cash flow and DCF coverage ratio will provide useful information to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to Adjusted EBITDA and distributable cash flow are net income and net cash provided by operating activities, respectively. Our non-GAAP financial measures of Adjusted EBITDA and distributable cash flow should not be considered as alternatives to GAAP net income or net cash provided by operating activities. Each of Adjusted EBITDA and distributable cash flow has important limitations as an analytical tool because they exclude some but not all items that affect net income and net cash provided by operating activities. You should not consider Adjusted EBITDA, distributable cash flow or DCF coverage ratio in isolation or as a substitute for analysis of our results as reported under GAAP. Because Adjusted EBITDA, distributable cash flow and DCF coverage ratio may be defined differently by other companies in our industry, our definitions of Adjusted EBITDA, distributable cash flow and DCF coverage ratio may not be comparable to similarly titled measures of other companies, thereby diminishing its utility.